return icon

HCM City asks to tighten credit in high-end property

The HCM City branch of the State Bank of Viet Nam has asked credit institutions to tighten the management on credit flow into the real estate sector and the transfer of money collected from real estate transactions abroad.

The dividing of land into lots to sell for profit is rampant nationwide. Banks started to tighten credit into the real estate sector to direct the capital flow into production and business for post-pandemic economic recovery. 

This requirement was raised in the context that the capital flow into the real estate market in the first months of this year increased rapidly, triggering concerns about rampant speculation which was pushing up property prices nationwide, while the Government was making efforts to control flows into the risky sector through credit and corporate bond channels.

Accordingly, the central bank’s branch asked credit institutions in the southern city to limit lending for investment in the high-end and tourism property segment and for speculation.

The transfer of money collected from property transactions must also be put under strict management.

Banks must provide flexible credit policies for those who had real demand for borrowing for home purchases, the branch asked.

Earlier in April, the central bank’s Banking Supervision Agency also asked credit institutions to strictly manage credit growth and credit quality for risky sectors including real estate, build-operate-transfer (BOT) and build-transfer (BT) projects, corporate bonds and securities. Besides, banks were also required to strengthen control of credit grants to borrowers who participate in land auctions.

Recently, some banks also temporarily halted providing new loans to the real estate sector, including Sacombank and Techcombank.

Sacombank asked its branches not to grant credit for new property transactions from March 23 to June 30.

Sacombank’s deputy director Phan Dinh Tue said that as the bank’s remaining credit room granted by the State Bank of Vietnam was small, the bank must tighten credit for the real estate sector and direct the flow into production and business.

Sacombank would give priority to the manufacturing sector, agriculture and rural sector, export, part-supply industry, small and medium-sized enterprises, enterprises which applied high technologies and high added value services, he said.

Still, Sacombank was willing to provide loans to those who had real demand for home repairs or purchases.

Since October 2021 when HCM City reopened its economic activities after a long period of closure to fight the COVID-19 pandemic, the capital demand of enterprises was huge, reflected through robust credit growth in the first four months of this year.

Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam’s HCM City branch, estimated that the total outstanding loans reached over VND3 quadrillion as of the end of April, increasing by seven per cent against the end of 2021. This was the highest growth rate in many years, he said.

The central bank targeted the credit growth rate at 14 per cent this year and said that it could be flexibly adjusted depending on the circumstances. Currently, many commercial banks are running out of credit room, thus tightening credit into the real estate sector was essential to direct the flow into manufacturing and business to accelerate post-pandemic economic recovery.

According to Nguyen Van Dinh, president of the Viet Nam Association of Realtors, credit tightening was necessary as dividing land into lots to sell for profit was rampant nationwide together with violations in bond issuance.

Credit tightening might not make real estate prices go down but liquidity could decrease and prices would go sideways, Dinh said.

Nguyen The Diep, chairman of Reenco Song Hong Investment Joint Stock Company, said that the real estate market needed a large amount of medium and long-term capital, especially in the post-pandemic period.

Diep said that any adjustments in capital sources in the real estate market would have huge impacts and when the real estate market had a problem, the economy would be affected. He said that caution and careful consideration must be given to credit tightening.

The credit tightening must be for specific segments, Diep said, adding that for the segments which were in a shortage of supply, such as low-cost homes, it was even necessary to expand loans to meet market demand.

In another effort, the Ministry of Finance has asked the General Department of Taxation to raise measures to prevent tax losses in real estate business and transfers.

Source: VNS


Vietnam contributes to International Law Commission

Vietnamese Ambassador Nguyen Hong Thao has pledged to make more contributions to the progress and development of international law, for peace, friendship, cooperation and sustainable development worldwide.

Pencak silat fighter enjoys golden year

Pencak silat fighter Quang Thi Thu Nghia has had amazing year of competition when she has won titles from all competitions that she took part in.

Pop singer to compete at MTV Europe Music Awards

Pop singer Pham Dinh Thai Ngan from HCM City will represent Vietnam at the MTV Europe Music Awards (MTV EMA) 2022.

PM hosts national committee on digital transformation’s third session

Prime Minister Pham Minh Chinh chaired the third meeting of the National Committee on Digital Transformation on August 8 to assess digital transformation pace during the first half of 2022 and devise tasks for the time ahead.

Liem to face off against chess king Carlsen at FTX Crypto Cup

Vietnam’s leading chess player Le Quang Liem has revealed that he will take on Norwegian chess king Magnus Carlsen at the FTX Crypto Cup which is scheduled to take place in Miami, USA, from August 15 to August 21.

Vietnam ranks third overall at ASEAN Para Games 2022

Vietnamese athletes bagged seven more gold medals on August 5, the last competition day of the ASEAN Para Games 2022, retaining their third place in the medal tally.

Corporate bond market struggling with challenges

The size of the corporate bond market is estimated at some VND1,374 trillion, equivalent to 15% of GDP. The Government aims to raise this figure to 20% by 2025.

President requires greater efforts to promote value of Ngoc Linh ginseng

Ngoc Linh ginseng deserves the "National treasure" title, and it is necessary to strongly promote the role of this treasure in improving people's livelihoods, President Nguyen Xuan Phuc said .

EVFTA outpaces CPTPP in preference utilisation rate

The utilisation rate of tax incentives set out in the EU-Vietnam Free Trade Agreement (EVFTA) during Q1 soared by over 32%, representing a four-fold rise compared to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Refusal to issue visas to new VN passport causes problems for travel firms

The rejection of Vietnam’s new passport by some EU member countries is affecting HCM City tourism companies since their customers are unable to travel to those countries.

Vietnam set to scrap COVID quarantine for imported processed seafood

The Ministry of Agriculture and Rural Development has removed COVID-related quarantine requirements for frozen processed seafood products imported for the purpose of reprocessing for export.

HCM City seeks to boost technology transfer from universities

Huynh Kim Tuoc, managing director of Sai Gon Innovation Hub's (SiHub) Start-up Support Centre under the HCM City Department of Science and Technology, affirmed Vietnam holds tremendous potential for technology development

Vigilance urged against COVID-19 amid emergence of new epidemics

Prime Minister Pham Minh Chinh asked ministries, agencies and localities to maintain vigilance against COVID-19 while addressing a meeting in Hanoi on Saturday.

Vietnamese, British agencies coordinate in identifying fire victims

The Consular Department under the Ministry of Foreign Affairs and the Vietnamese Embassy in the UK will continue to coordinate with Vietnamese and British agencies to identify victims in a blaze in Greater Manchester on May 7.

Photo contest highlighting beauty of Vietnamese islands kicks off

Professional and amateur photographers across Vietnam are encouraged to compete in a photo contest highlighting the beauty of Vietnamese Hoang Sa and Truong Sa islands.